27.

Financial data for Beaker Company for last year appear below:

Beaker CompanyStatements of Financial PositionBeginning BalanceEnding BalanceAssets:Cash$277,000$136,386Accounts receivable179,000205,000Inventory257,000270,000Plant and equipment (net)476,000440,000Investment in Cedar Company255,000288,000Land (undeveloped)335,000335,000Total assets$1,779,000$1,674,386Liabilities and owners' equity:Accounts payable$203,000$152,000Long-term debt862,000862,000Owners' equity714,000660,386Total liabilities and owners' equity$1,779,000$1,674,386

Beaker CompanyIncome StatementSales$1,960,000Less operating expenses1,597,400Net operating income362,600Less interest and taxes:Interest expense$105,800Tax expense141,414247,214Net income$115,386

The company paid dividends of $169,000 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company.

Required:

a. Compute the company's margin, turnover, and return on investment for last year.

b. The Board of Directors of Beaker Company has set a minimum required return of 30%. What was the company's residual income last year?